4. Estudio administrativo – legal
4.1. Estudio administrativo
4.1.1. Descripción de Puestos
Intended by P&C-
insurers (n = 8) Perceived by B2B-clients (n = 171) Needed by B2B-clients (n = 171)
Mean SD Mean SD Mean SD
Pricing
Operational excellence 23,1 15,3 45,8 28,3 47,7 30,9
Product leadership 35,6 13,5 28,2 22,2 26,9 22,2
Customer intimacy 41,3 16,4 26,0 20,1 25,4 21,4
Products and services
Operational excellence 15,6 17,6 35,8 28,4 30,7 28,1 Product leadership 45,0 20,7 25,9 21,0 22,8 20,7 Customer intimacy 39,4 12,7 38,3 26,7 46,4 28,2 Gap 2: Significant difference from P&C-insurers’ intention to B2B-clients’ needs? Gap 3: Significant difference from P&C-insurers’ intention to B2B-clients’ perception? Gap 4: Significant difference from B2B-clients’ perception to B2B- clients’ needs? Pricing Yes: OE ↑ PL – CI ↓ Yes: OE ↑ PL – CI ↓ No
Products and services Yes: OE – PL ↓ CI – Yes: OE ↑ PL ↓ CI – Yes: OE ↓ PL ↓ CI ↑
We already observed at the beginning of Chapter 4 that B2B-clients considered ‘pricing’ and ‘products and services’ as the most important elements in a value proposition. The results of our gap analysis on these elements contributes to an interesting discussion – first of all because we observe a possible contradiction in B2B-clients’ needs.
5.1.1 A potential contradiction in B2B-clients’ needs
Combining the insights obtained from the elements ‘pricing’ and ‘products and services’, we might observe a possible contradiction in B2B-clients’ needs. The results indicate that an individual B2B- client needs products which are more tailor-made, so that the products are relevant to the specific needs of the client. This can be observed from the fact that an individual B2B-client’s needs for customer intimacy on the element ‘products and services’ was significantly higher than what he currently perceives (gap 4). At the same time, no significant gaps were found between P&C-insurers’ intention and B2B-clients’ needs on customer intimacy on the element products and services (gap 2). This would imply that P&C-insurers know their clients’ needs for tailor-made products, but that the individual client still needs a higher level of customization of products than he currently perceives. Customizing products will come at a cost though, and here we observe the seemingly contradiction. From the element ‘pricing’, the results indicate that B2B-clients are less willing to pay for products which are tailor-made (customer intimacy). This can be observed from the fact that B2B- clients’ needs on pricing are significantly lower on customer intimacy compared to what P&C- insurers assume in their intention (gap 2). Instead, B2B-clients demand lower prices and better price- quality ratio’s, compared to what P&C-insurers intend to deliver. This can be observed from the fact that B2B-clients’ needs are significantly higher on operational excellence compared to P&C-insurers’ intention (gap 2).
Nevertheless, these results may reflect the tension that was described in the research background of this study, as P&C-insurers are asked to deliver different kinds of value simultaneously. On the one hand, customers demand more relevant products, services and advice (Accenture Research, 2013, p. 29). On the other hand, P&C-insurers need to compete on price in this “mature and saturated market” (Achmea Schadeverzekeringen N.V., 2012, p. 9).
The need for more tailor-made products is contrasted with a significantly lower need for product leadership on the element products and services, compared to what P&C-insurers intend (gap 2). This would imply that B2B-clients do not necessarily need to insure all their risks with high quality, innovative products. This implication seems to be reinforced by the fact that product leadership is even lower for the individual B2B-client’s needs compared to current perception (gap 4). So, while the intention of most P&C-insurers’ intention on ‘products and services’ now seems to be balanced between customer intimacy and product leadership (high quality, innovative products), the focus may have to shift towards more customer intimacy. As B2B-clients only insure what is relevant, the amount of unnecessary insurance products may also decrease, hence lowering their premiums paid. Therefore, the following implication can be derived for P&C-insurers:
• P&C-insurers should focus on offering products and services which cover relevant risks, and not necessarily on products insuring all risks.
5.1.2 Standardized vs. tailor-made products and the segment ‘in between’
In the current situation, we already observe that P&C-insurers offer pre-defined, industry-specific insurance packages, thereby combining the benefits of insuring only what is relevant to the B2B- client (customer intimacy in products), and premium discounts (operational excellence) if a B2B- client closes multiple policies at once. This is what we observed in the communication regarding the web pages on ‘SME packages’ (see Table 12), for which operational excellence was marked as ‘dominant’ value discipline for three of the five P&C-insurers. ‘Premium’ and ‘discount’ comprised 60 of the 83 keywords that were counted on operational excellence for SME packages. However, from the interviews with P&C-insurers, we observed that most P&C-insurers do not necessarily intend to compete on price, but also on convenience such as the time spent on closing the policy. For example, Insurer Bravo intends to offer more operational excellent value propositions towards B2B-clients with less than 10 fte, as clients should be able ‘to close a policy within 20 minutes’.
However, not all B2B-clients’ needs can be satisfied with a standardized SME-package. This might be the case as soon as a client’s risks become more complicated, for example when the firm grows larger and starts to employ activities that are not directly related to the typical industry for which the insurance package was designed. Moreover, SME packages are currently mainly offered for segments which are larger and/or easy to insure, such as professional services, construction, retail and wholesale, and hotel and catering. The challenge for P&C-insurers would be to offer such insurance packages or other simplified solutions for firms of larger size and different industries as well. Some P&C-insurers acknowledge this challenge themselves, such as Insurer Charlie, stating that they can offer easy, standardized products for smaller clients (up to 10 or 20 fte) and more expensive tailor-made products for large corporate clients (e.g. more than 80 or 100 fte). However, there is no suitable solution yet for the segment in between, which Insurer Charlie defines as firms with 20-80 fte (or 10-100 fte). This leads to the following implication:
• A challenge for P&C-insurers is to offer a wider variety of insurance packages and more flexibility within these packages at lower costs, especially for clients who cannot be insured sufficiently via the current standardized (industry-specific) insurance packages, and who are too small for truly tailor-made products as offered to corporate clients.
During the interviews with P&C-insurers, multiple solutions were suggested for this ‘in between’ segment. Some P&C-insurers mainly intend to offer a wider array of insurance packages
based on modular solutions. For example, if a wholesale company also starts to directly deliver single products to end clients, their policy might be expanded by adding a product module that is originally intended for a company in courier services. This is an example of how the flexibility within insurance packages can be increased in order to provide better solutions to more complicated clients as well. This example was given by Insurer Delta. Another example is Insurer Charlie, who already claims to … [Confidential]. An example of a different approach is Insurer Foxtrot. Insurer Foxtrot offers … [Confidential].
In short, every P&C-insurer might choose for an approach which is based on its current strengths. As every P&C-insurer emphasizes its own strengths, this may offer the potential to deliver a distinctive kind of value. The question is whether this distinctive value is also perceived by B2B- clients, for which we have to study the gaps linked to B2B-clients’ perception in further detail.
5.1.3 Current perception of relevant and distinctive products
While P&C-insurers might assume in their intention that B2B-clients are willing to pay more for an insurer who knows the clients’ needs and who customizes its products accordingly, the needs of B2B- clients for such a form of customer intimacy on the element ‘pricing’ is significantly lower than P&C- insurers’ intention (gap 2). Therefore, if P&C-insurers aim to create value apart from just a competitive price (e.g. more customer intimacy by knowing what clients need), they should better explain what added value they deliver to B2B-clients. This seems to be an execution problem, because B2B-clients already perceive lower levels of customer intimacy than P&C-insurers intend to deliver on pricing (gap 3). Therefore, the added value of tailor-made products which P&C-insurers intend to deliver does not fully resonate (yet) with B2B-clients.
Combining this insight with a higher perception and need on operational excellence on ‘pricing’, our results might reflect a development towards ‘commoditization’ in P&C-insurance. For three of our interviewed B2B-clients, differences are unknown because they “cannot make a comparison, because I have had the same P&C-insurer and intermediary for over 20 years.” However, even when a comparison is made, Insurer Charlie indicated that “differences in products are hard to find – even for us as an insurer”. B2B-clients may not perceive that they are paying more for tailor- made products and services. As B2B-clients do not see the differences between the offerings of various suppliers, price will play a more important role in their choice. Two of the six P&C-insurers actively mentioned that they anticipated ‘commoditization’ as an important future trend.
However, most P&C-insurers do not have an intention to compete on price in such a commodity market. Still, B2B-clients already perceive significantly higher levels on operational excellence than P&C-insurers intend (gap 3). No significant gaps were found between B2B-clients’ perception and needs, which might indicate that B2B-clients are satisfied with the current distinctive value that P&C-insurers are perceived to deliver on pricing (i.e. low prices and the best price-quality ratio). While this perception may not present an immediate problem, it might become one in the future if B2B-clients keep expecting lower prices that P&C-insurers do not intend to deliver. As Treacy and Wiersema (1997) argued, customer value can be destroyed if the value delivered falls short of clients’ expectations. Therefore, the implication for P&C-insurers is as follows:
• If P&C-insurers do not intend to compete on price, they should make this clear to clients in order to prevent that clients’ (future) expectations for lower prices are not met.
If products need to be more tailor-made, but clients’ willingness to pay for it is lower, a question would be: which elements also need to be more tailor-made and how feasible is it to realize this against competitive prices? We will proceed with two elements on which we also observed a tendency towards less operational excellence and/or more customer intimacy.